If a New Direct Loan Is Originated Before January 31, 2022, Will Interest Be Suspended (0%) Through January 31?

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This AskRegs Knowledgebase Q&A has been updated to reflect the U.S. Department of Education StudentAid.gov announcement, which extends the federal student loan administrative forbearance period, the pause in interest accrual, and the suspension of collections activity through January 31, 2022 for all federally held student loans.

Unfortunately, we don’t yet know if new loans will carry the interest suspension. We have asked the U.S. Department of Education (ED) but have not gotten a response. As soon as we have a definitive answer to this question, we will update this AskRegs Q&A and post it in our COVID-19 Web Center and in Today's News. Be sure to visit the Web Center on a daily basis, as guidance is continuously changing.

Remember: For borrowers who are receiving the interest suspension, the interest rate technically is not zero on these loans. Even if the loan servicer indicates a zero percent interest rate, the interest rate on the loans remains the interest rate assigned to the loan when it was originated. See AskRegs Q&As, What Are the Direct Loan Interest Rates For 2020-21? and What Are the Direct Loan Interest Rates For 2019-20?, for example. Accrual of interest is just suspended from March 13, 2020 through January 31, 2021 on eligible federal student loans.

Note: This AskRegs Q&A was previously updated to reflect expanded timeframes in the August 8, 2020 Presidential Memorandum and the August 21, 2020 Electronic Announcement.


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